Gearing v. City of Half Moon Bay

54 F.4th 1144

Thomas GEARING ; Daniel Gearing, Plaintiffs-Appellants,

v.CITY OF HALF MOON BAY, Defendant-Appellee.

No. 21-16688

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 20, 2022 San Francisco, California

FILED DECEMBER 8, 2022

Kristen Ditlevsen Renfro (argued), Brian Manning and Gary Livaich, Desmond Nolan Livaich & Cunningham, Sacramento, California, for Plaintiffs-Appellants.

Matthew Dwight Zinn (argued), Benjamin Gonzalez and Tori Gibbons, Shute, Mihaly & Weinberger LLP, San Francisco, California, for Defendant-Appellee.

Before: SIDNEY R. THOMAS and MILAN D. SMITH, Jr., Circuit Judges, and MICHAEL J. McSHANE,^* District Judge.

OPINION

M. SMITH, Circuit Judge:

After the City of Half Moon Bay rejected Thomas and Daniel Gearing's proposal to develop housing on their properties, they sued the City in federal court pursuant to 42 U.S.C. § 1983, alleging a regulatory taking and related claims. The City then initiated eminent domain proceedings in state court to acquire the Gearings' properties. The City filed a motion in the federal case to abstain pursuant to Railroad Commission of Texas v. Pullman Co. , 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941), pending resolution of the eminent domain action. The district court granted the motion, and the Gearings now appeal.

The Gearings argue that Knick v. Township of Scott , ––– U.S. ––––, 139 S. Ct. 2162, 204 L.Ed.2d 558 (2019) and Pakdel v. City and County of San Francisco , ––– U.S. ––––, 141 S. Ct. 2226, 210 L.Ed.2d 617 (2021), which rejected state-forum exhaustion requirements for takings claims, preclude Pullman abstention in this case because abstention would force them to litigate their federal claims in state court. They alternatively assert that the requirements for Pullman abstention are not met. We affirm because Knick and Pakdel do not apply here, and the requirements for abstention are met.

FACTUAL AND PROCEDURAL BACKGROUND

The Gearings own six undeveloped parcels of property in the West of Railroad (WRR) area of the City of Half Moon Bay. Their properties are subject to the City's land-use restrictions. The City's Land Use Plan (LUP) zones the WRR area for public recreation and severely restricts housing development. Under LUP Section 9.3.5, a landowner seeking to build in the WRR area is first required to submit a master plan that analyzes the impact of the proposed development on the area's conservation and recreation zones. The city council and an environmental review board must then approve the plan.

On October 1, 2020, the Gearings submitted a letter to the City, titled "Preliminary Application for Development from Thomas Gearing and Daniel Gearing Pursuant to Housing Crisis Act and Senate Bill 330," which they contend was an application to build housing on their properties pursuant to California Senate Bill 330 (SB 330). SB 330 was enacted in 2019 to increase the stock of affordable housing in the state, and it prohibits local agencies from rejecting affordable-housing proposals unless the agency makes a specific written finding that the project would have an adverse impact upon the public health or safety. Cal. Gov't Code § 65589.5(a)(1)(A), (d). The Gearings take the position that SB 330 requires the City to approve their proposed development project.

The City rejected the proposal and informed the Gearings that SB 330 did not require approval of their proposed project because a master plan for the WRR area had never been approved, as required by LUP Section 9.3.5. Three months later, the City informed the Gearings that it intended to acquire their properties through eminent domain and made an offer to purchase the properties based on their appraised values, which the Gearings rejected.

On March 15, 2021, the Gearings filed this action in the district court, claiming, among other things, that the City effected a regulatory taking in violation of the Fifth and Fourteenth Amendments by rejecting their building proposal and enforcing LUP Section 9.3.5's restrictions on their property. On March 23, the City filed an eminent domain action in state court. The City then filed a Motion to Abstain in the federal case pending resolution of the state action, which the district court granted. The Gearings now appeal.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction pursuant to 28 U.S.C. § 1291. We review a district court's Pullman abstention under a modified abuse of discretion standard. Smelt v. County of Orange , 447 F.3d 673, 678 (9th Cir. 2006). "We first review de novo whether the requirements for Pullman abstention are satisfied." Courthouse News Serv. v. Planet , 750 F.3d 776, 782 (9th Cir. 2014). "If they are not, the district court has ‘little or no discretion' to abstain; if they are, we review the decision to abstain for an abuse of discretion." Id. (quoting Almodovar v. Reiner , 832 F.2d 1138, 1140 (9th Cir. 1987) ).

ANALYSIS

Pullman abstention is "an equitable doctrine that allows federal courts to refrain from deciding sensitive federal constitutional questions when state law issues may moot or narrow the constitutional questions." San Remo Hotel v. City & County of San Francisco , 145 F.3d 1095, 1104 (9th Cir. 1998) (San Remo Hotel I ). It is appropriate where (1) the federal constitutional claim "touches a sensitive area of social policy," (2) "constitutional adjudication plainly can be avoided [or narrowed by] a definitive ruling" by a state court, and (3) a "possibly determinative issue of state law is doubtful." Sinclair Oil Corp. v. County of Santa Barbara , 96 F.3d 401, 409 (9th Cir. 1996) (quoting Pearl Inv. Co. v. City & County of San Francisco , 774 F.2d 1460, 1463 (9th Cir. 1985) ). Abstention serves the interests of both federalism and judicial economy. See Pullman , 312 U.S. at 501, 61 S.Ct. 643.

I. Knick and Pakdel Do Not Preclude Pullman Abstention

The Gearings first argue that the Supreme Court's recent rulings in Knick and Pakdel preclude Pullman abstention when abstention would subject a takings plaintiff to "effective exhaustion requirement[s]." Prior to Knick and Pakdel , a plaintiff challenging a state land-use policy under the Takings Clause of the Fifth Amendment—which provides that "private property [shall not] be taken for public use, without just compensation"—needed to overcome the exhaustion and ripeness hurdles set out in Williamson County Regional Planning Commission v. Hamilton Bank , 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985). Williamson County held that takings plaintiffs may not bring their claims in federal court until they have tried, and failed, to obtain just compensation through state channels. Id. at 194–95, 105 S.Ct. 3108. The Court held that a takings claim was not ripe until (1) "the government entity charged with implementing the [land-use] regulations has reached a final decision regarding the application of the regulations to the property at issue," id. at 186, 105 S.Ct. 3108, and (2) "the owner has unsuccessfully attempted to obtain just compensation through the procedures provided by the State," id. at 195, 105 S.Ct. 3108.

Knick overturned the latter, and Pakdel clarified the former of these ripeness requirements. In Knick , the Court held that a property owner "acquires an irrevocable right to just compensation immediately upon a taking" and is not required to seek and be denied compensation in state court before bringing a federal claim. 139 S. Ct. at 2172 (emphasis added). The Court reasoned that requiring property owners to go first to state court would impose "an unjustifiable burden" by "effectively establish[ing] an exhaustion requirement." Id. at 2167, 2172.

In Pakdel , the Court rejected the imposition of an administrative exhaustion requirement on takings plaintiffs. Pakdel clarified that Williamson County 's "final decision" rule is "relatively modest" and does not require property owners to pursue every administrative channel theoretically available to them. 141 S. Ct. at 2229–31. Instead, "[a]ll a plaintiff must show is that there is no question about how the regulations at issue apply to the particular land in question." Id. at 2230 (cleaned up).

The Gearings argue that these cases also preclude Pullman abstention in certain takings actions. As an initial matter, neither Knick nor Pakdel explicitly limit abstention in takings litigation. Neither case even addresses abstention. Rather, they address ripeness, which goes to when a claim accrues for purposes of judicial review. See, e.g., Knick , 139 S. Ct. at 2170 ("[A] property owner has a claim ... as soon as a government takes his property for public use without paying for it." (emphasis added)); id. at 2168 ("[An] owner has suffered a violation ... when the government takes his property ... and therefore may bring his claim in federal court under § 1983 at that time. " (emphasis added)).

Abstention, on the other hand, allows courts to stay claims that have already accrued. See, e.g., San Remo Hotel v. City & County of San Francisco , 545 U.S. 323, 324, 125 S.Ct. 2491, 162 L.Ed.2d 315 (2005) ( San Remo Hotel II ) ("[The court] invoked Pullman abstention after determining that a ripe federal question existed as to petitioners' facial takings challenge."). Abstention doctrines do not create a condition precedent to litigation; rather, they serve federalism by allowing a state court to decide state-law issues in the first instance. See Harman v. Forssenius , 380 U.S. 528, 534, 85 S.Ct. 1177, 14 L.Ed.2d 50 (1965) ("[A]bstention may be proper in order to avoid unnecessary friction in federal[-]state relations[ and] interference with important state functions.").

The Gearings acknowledge this but argue that Knick and Pakdel implicitly preclude abstention in this case because it would subject them to "effective exhaustion requirement[s]"—"the same functional problem litigants faced under the now-repudiated Williamson County . " They claim that Knick and Pakdel should be "broadly understood to [rejec...